2012 is fast approaching, and with it comes big changes in the Federal IT industry. WashingtonExec is giving local executives the opportunity to share their thoughts on where they see the government contracting industry headed. Leaders of the industry were asked a series of predictions questions focused on challenging issues such as cloud computing, healthcare IT, defense and so forth.
Dave Melcher, CEO and President of ITT Exelis told WashingtonExec what he believes will happen to U.S. defense spending in 2012.
“For the next few years, concern over fiscal deficits will put increasing pressure on government spending, including defense expenditures. Sound fiscal policy is essential to the future of our nation, as is ensuring its safety and security. Our world is growing in complexity and risk, and threats to our nation remain numerous, asymmetric and unlikely to abate. Long-term funding levels and priorities remain unclear pending completion of Super-Committee deliberations. And in the short term, we could face another year of continuing resolutions (CR) which confound planning and increase disruption and inefficiency for both the public and private sectors.
In such an environment, coordination between the DoD and industry will be increasingly critical. Prioritization will force some tough decisions, and government and industry must work together to retain a strong and healthy U.S. industrial base. Our customers are re-looking at the way capabilities are procured and experimenting with novel approaches. The Army’s Network Integration Evaluation (NIE), for example, is an excellent effort to increase the speed of the acquisition process and drive increased affordability in communications systems. I believe that industry should reflect the changing priorities of our customers, and we will need to work actively with the government to make the acquisitions process more efficient and effective.
The last defense downturn brought a significant amount of industry consolidation, but I believe that we are unlikely to see that degree of consolidation over the next few years as the industry is already highly concentrated. However, depending on the severity of spending reductions the shape of industry could be changed in ways that we cannot quite see yet. We at ITT Exelis will manage our diverse product and service portfolio to best align with our customers’ enduring priorities and continually adapt to provide the most essential technologies for both current and future strategies and missions.
Exelis is well positioned for the challenging times that lie ahead. We have a record of solid program performance and operational excellence, and know how critical it is to deliver on time and on budget. We are leaders in segments of the market that will endure over time, in the areas of electronic warfare, ISR, navigation and information exploitation. Ensuring access for US and allied forces and denying access to adversaries will remain top priorities, and our technologies and solutions are essential to these missions. Also, Exelis is focused around affordable and ready-now solutions, which can help the DoD realize true savings when they are needed most.
Overall, I remain positive on the long-term outlook for the defense industry. We serve a truly critical need, and in spite of the current political turmoil, I am convinced that government and industry will work together to address the need for savings, while delivering the very best security capabilities to our nation.”